Tax could cost Pies $300,000 a season

Caroline Wilson

THE AFL has unveiled a Robin Hood-style plan to tax the wealthy clubs in a bid to help the poorer clubs in a controversial increase in attendance levies under which Collingwood, Essendon, Hawthorn and Geelong would be charged an extra $1 a fan at the turnstiles.

The proposal, to be put forward to the commission next month, received a lukewarm response from the Magpies, who estimated the gate tax would cost their club an estimated $300,000 a year.

Fremantle, which has been included along with West Coast in the top gate-takings bracket, is already embroiled in determined negotiations with the AFL to be removed from the group of so-called wealthy clubs.

There is a $2 levy charged for every person attending an AFL game and that money is taken from the home club's revenue and put into an equalisation fund.

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Under the AFL plan, Collingwood, Essendon, Geelong, Hawthorn, West Coast and Fremantle would be taxed an extra dollar a fan in a scaled increase over a three-year period.

A further six clubs - North Melbourne, the Western Bulldogs, Melbourne, Richmond, St Kilda and Port Adelaide - would have their gate-taking tax gradually halved over the corresponding three years.

Carlton, Adelaide, Sydney and the Brisbane Lions would all remain static on a levy of $2 per fan.

The tax is part of a significantly wider push to radically equalise club finances with the AFL increasingly concerned by the multi-million-dollar debts still being carried by five of the above-mentioned clubs, with only Melbourne having drastically reduced its debt through an annual call upon its supporters now in its third year.

Special assistance of $6.8 million in total is being distributed annually to Melbourne, the Bulldogs, North and Port Adelaide but the AFL revealed to its club chief executives last week that it planned to potentially triple its ASD funding under the new broadcasting agreement. It is understood the clubs were told that special assistance, which would be rebranded with a new set of strict conditions, could increase from 2012 to a minimum $16 million and a maximum annual $22 million.

That money would go towards debt reduction and increased revenue streams such as free-to-air advertising and other corporate and membership incentives, preventing situations such as that faced by the Kangaroos last Saturday night where the club baulked at risking a $20,000 fine by playing a footballer not named as an emergency and lost a game by three points that could cost it a place in the finals.

However, the AFL message to clubs was that the league would heavily monitor those clubs in their decision-making processes. The recent unmitigated $500,000 settlement with coach Mark Williams by a cash-strapped and AFL-beholden Port Adelaide being an obvious example of such a decision.

AFL executive Gillon McLachlan said of the proposed gate-tax increase to the wealthy clubs: ''That was one proposal put forward and we have looked at several scenarios where the gate is concerned. We've got to have a discussion with the commission before we reach any final decision.''

Collingwood boss Gary Pert chose his words carefully, telling The Age: ''Collingwood gave its opinion on it and wanted to know what the other alternatives were. The proposal came out of the blue and we are hopeful there will be further discussion.''

The Magpies are heading for a record aggregate attendance this season and under this year's model would be losing an extra $300,000 a year in revenue by 2012, more than half the club's forecast 2010 profit.

It is understood that the Dockers' entire 2010 profit would be wiped out by the tax under the AFL model.

Said CEO Steve Rosich: ''We would oppose an increase in equalisation costs on behalf of our members and I feel pretty comfortable that we will not be charged extra at the gate. Our club has already begun to address what is a preliminary proposal and although it's yet to be addressed by the commission the AFL is aware of our views.''

71 comments so far

So let's get this right, the AFL is embarking on a process of rewarding mediocrity, and punishing those that are successful. Sign a bad stadium deal, complain and it is Collingwoods fault. Refuse to move interstate, have your members vote to stay, and now we all have to pay. Nobody wants to lose a club, but seriously, don't we give enough 12 times a year with away games and we still show up at the gate. Perhaps the best option would be to boycott a couple of games and send the entrance straight to CFC

Commenter

Pie Fan

Location

Earth

Date and time

July 27, 2010, 6:32AM

The figures don't quite add up. If it costs Colingwood $300k over 11 home games that would suggest an average crowd of less than 30000. Is it $2 per adult or does it exclude MCC/ AFL/ Medallion/ club members?

Commenter

Rob

Location

Melbourne

Date and time

July 27, 2010, 6:39AM

And to think they sold Fitzroy football club down the river for less than 3 million. The problem today is that there are too many ordinary players on fairly high wages which leaves half the clubs in a financially precarious position. Add the fact that the AFL is hell bent on expanding it's competition rather than consolidating it and you are left with a house of cards that sooner or later is going to end up with forced "mergers" for the so called good of the game.

Commenter

nathan

Location

melbourne

Date and time

July 27, 2010, 7:13AM

Speaking as a Collingwood supporter, I have no problem with subsidizing others clubs through an equalization fund despite the constant hypocritical and duplicitous whining about our club from other supporters. A strong league is good for the game.

Commenter

go pies

Date and time

July 27, 2010, 7:33AM

I barrack for Geelong, one of the teams listed, but I don't have a problem with successful teams contributing more to the pot.

The successful teams are the beneficiary of the success of the AFL as a whole. They are not standalone companies that could function without it.

By ensuring the existing teams survive, are strong enough to compete successfully, and their supporters not alienated, then the AFL as a whole benefits from an increased, better quality and more even competition. Of course people's natural reaction is to say 'why reward the unsuccessful', but this is self-interest masquerading as free market ideology.

Also, success begets success in the AFL. It's a downward spiral for unsuccessful teams - the strong ones get Friday night matches, play at bigger grounds, play more 'blockbusters', and receive all the marketing and gate revenues this suggests.

The safety net exists for all teams - and at different points in the few decades past, you would not have been surprised to see Geelong and Hawthorn in the bottom pack and Richmond and Carlton in the top.

Commenter

AZ

Date and time

July 27, 2010, 7:50AM

They AFL should equalise everything. There is no way the pies should have the last 7 or 8 (what seems like 100) game at the MCG.

The draw should be equal, none of this stcking that currnelty goes on and before anybody starts complaining, I know the other clubs ak for it.

Once everything is equal, if any clubs cannot exist in their own right, then they should fold.

none of this biased drawing and then clubs like collingwood, etc woldnt need ot pay extra to boost the lesser likes of North, etc.

Commenter

Cambo

Date and time

July 27, 2010, 7:54AM

So the successful clubs, both on and off field, are expected/requested to prop up/bail-out the clubs that have consistently made bad player, admin and financial decisions, at a time when the league are desperate to increase the number of clubs so they can gain extra money through TV rights.

It sucks. I am not impressed. As a member of Hawthorn FC, the club and fans dug deep to keep the club alive, and now seeing the fruits for long hard work.

It seems to be that if the AFL was serious about financial stability, it would contract to 14 strong viable sustainable teams. This would provide1: all teams play each other team home & away twice2: greater skill on display (god willing)3: less impact on playing surfaces4: games that regular fill the MCG, not just for blockbusters.

As for Collingwood, every team loves a home game against them as they provide significant numbers of fans and are effectively already supporting the weaker clubs.

Commenter

Gerryk

Location

Melbourne

Date and time

July 27, 2010, 8:03AM

Wake up people this is a typical Demetriou hose job. Whether the AFL gives struggling clubs a couple of million every year in direct injection or they "tax" clubs differently, it is the same thing. It is simply a way to keep 16, soon to be 18, teams on the park to create more games per year which helps drive up the revenue the AFL gets from the TV stations. Important point. The AFL gets the revenue, not the clubs. It is in the AFL's interest to have more teams, even if they are, and always will be financially nonviable.So in the end, it doesn't matter if the AFL hand out "equalisation" money at the end of the year or they "tax" wealthier clubs during the year, it is all the same thing. The strong clubs support the weak clubs to enable the AFL to get more money. Take from my left pocket or my right pocket, it doesn't matter, you are still taking my money.

Commenter

Gilly

Location

Melbourne

Date and time

July 27, 2010, 8:09AM

As a member of an AFL club I expect my contributions to benefit my club, not be dispersed to clubs which can't garner their own support or manage their finances properly. Collingwood is already the cash cow of the AFL and the scapegoat for every other supporter with a gripe about anything from fixtures, jumpers and media coverage . The AFL should keep their greedy mitts off our money and demand that the weaker clubs become accountable. Collingwood fixed their own problems back in the '90s ( without AFL help) so can everyone else.

Commenter

Emily

Location

Perth

Date and time

July 27, 2010, 8:16AM

If finances are so tight why are players, coaches and AFL executives being paid such high wages? Players get paid far higher wages than the average person can ever dream of earning.

Lower the salery cap and that will free up some money for clubs rather than charging the fans more.

I realise players in other codes of sport in the USA and Europe get paid much more than AFL players but who wants to pay $150pp to go and see a game of footy like it costs to see a game of basketball or other sports in the USA? Why should fans pay for spoilt overpaid sport starts?